Korean Giant Doosan Acquires Storage Software Maker 1Energy Systems

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1Energy Systems, a Seattle company making software to integrate batteries and other distributed energy technologies with the electricity grid, has been acquired by Doosan Heavy Industries & Construction (DHIC), a 120-year-old Korean conglomerate with a major power generation business.

1Energy, founded in 2011, never took outside investment. Its principals, including founder and CEO David Kaplan, made a seed investment—$1.45 million in 2013, according to an SEC filing—and grew the company to 25 employees on revenue from utility customers such as Duke Energy, Snohomish County Public Utility District, Puget Sound Energy, and Austin Energy.

DHIC is paying in the double-digit millions of dollars for 1Energy, a spokesman tells Xconomy. The acquisition was made June 30 and announced Monday. Seattle-based investment bank Cascadia Capital advised 1Energy on the deal.

The 1Energy business will become a new division of DHIC, known as Doosan GridTech, and will remain in Seattle with all employees joining, according to an open letter announcing the deal on 1Energy’s website. Kaplan will be chief operating officer. Daejin Choi, a DHIC vice president, is relocating to Seattle to be CEO of Doosan GridTech. The company plans to add employees in Seattle through hiring and relocation of Doosan employees from Korea.

1Energy—now Doosan—plays an important role, leveraging the region’s software expertise to create a platform that helps utilities integrate, manage, and control energy storage and renewable energy generation systems. Customers are using the software to help manage energy storage projects with a combined power capacity of about 30 megawatts. The software tells individual batteries when to charge and discharge, and it helps coordinate fleets of energy storage systems in response to changing electricity grid conditions and utility goals.

“Wind and solar power, energy storage and the advent of electric vehicles are changing how the grid operates,” Kaplan says in a news release. “Intermittent and distributed sources of both energy demand and generation require a more dynamic, digital grid, where power flows both ways—to and from the end customer.”

Kaplan spent 12 years at Microsoft and two at Seattle-based Impinj before stepping out on his own as an entrepreneur. Prior to 1Energy, he founded V2Green in 2006, focusing on integrating electric vehicles with the grid. That company was acquired in 2008 by GridPoint.

He has also been a designer of and advocate for the Modular Energy Storage Architecture (MESA), an open standard for storage device design and communications between energy storage systems and utility grid control systems. MESA’s goal is to allow smooth integration of different energy storage technologies from the many manufacturers competing in the fast-growing industry.

GTM Research estimates some 281 megawatts of energy storage systems will be installed in the U.S. this year, worth $528 million. By 2021, the market is expected to be more than seven times larger, led by states such as California, New York, Massachusetts, and Hawaii.

“The elimination of technology silos—by embracing open standards—will reduce costs across the industry, enabling the rapid scale up of battery storage and more distributed energy,” Kaplan says. “Doosan recognizes that interoperability among systems is critical to not only sustain a trajectory of growth, but to drive quality and the availability of interoperable, distributed energy resources.”

DHIC’s global reach and scale—it had 2015 revenues of $17 billion—should help drive adoption of the MESA standard.

For DHIC, the acquisition represents a further push into the U.S. market, and other parts of the energy industry.

“Acquiring 1Energy furthers a multi-year strategy to extend Doosan Heavy Industries & Construction’s energy solutions portfolio from power generation to transmission and distribution, and to increase the firm’s presence in distributed and renewable energy technologies,” Choi and Kaplan write in the open letter. “1Energy’s software platform will form the foundation of a set of solutions designed to accelerate adoption of distributed energy resources on power systems worldwide.”